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Tech Companies Under Pressure to Combat Online Fraud

The responsibility for taking action against online fraud largely falls on the tech companies themselves. However, the history of Big Tech suggests that these companies often wait for legislative threats, social unrest, or financial pressure before making substantial changes. As noted by Wang from the University of Texas, there is a prevailing sentiment that corporations will not act unless mandated by regulations or incentivized by profit.

In a bid to address the issue, various tech firms, including Meta, Match, and Coinbase, formed a coalition known as Tech Against Scams last year. This initiative aims to facilitate the sharing of best practices and strategies to combat online fraud. Yet, experts indicate that there have been limited tangible outcomes from this collaboration thus far.

At a critical juncture where more resources are necessary to tackle the increasing challenges on their platforms, many social media companies, such as X and Meta, have made significant cuts to their trust and safety departments, laying off hundreds of employees. This downsizing inevitably diminishes their capability to address urgent issues effectively. Following the reelection of Donald Trump, Meta has been observed to scale back its moderation and fact-checking efforts, a move that was notably praised by the former president.

Despite this lack of action from tech giants, there has been a rising trend of accountability among certain individuals in the tech space. For instance, Changpeng Zhao, the founder of Binance—recognised as the largest cryptocurrency exchange globally—was sentenced to four months in prison last April for violations of U.S. money laundering laws. Additionally, the company faced the forfeiture of approximately $4 billion for various offenses, including allowing users to evade sanctions. In another case, Alexey Pertsev, a co-founder of Tornado Cash, received a prison sentence of more than five years in the Netherlands for his role in laundering money for high-profile criminal actors, including the notorious Lazarus Group connected to North Korea. Furthermore, in August of last year, French authorities arrested Telegram CEO Pavel Durov on charges of complicity related to drug trafficking and the distribution of child sexual abuse material.

Experts, such as Tower from the U.S. Institute of Peace (USIP), argue that social media platforms should closely examine the legal precedents set by these cases. There is a growing perception that governments may begin to hold companies accountable for facilitating extensive transnational criminal activities.

Compounding the challenges faced by tech companies is the rapid integration of user-friendly artificial intelligence into scams. Individuals who previously trafficked people shared experiences highlighting their tactics prior to the widespread use of generative AI; they would avoid video calls or resort to using pre-recorded clips to deceive targets. One individual mentioned that he was compensated for recording his voice to convey various emotions, which was then utilized to train an AI model. Recent reports have illuminated the capabilities of scammers employing AI-enhanced “face swap” and voice modulation technology to recreate identities more convincingly. Gabrielle Tran, a senior analyst on technology and society at the Institute for Strategic Technology (IST), cautioned that malicious actors are adept at exploiting these advanced models to produce deceptive content at an unprecedented scale. ‘These models are deliberately fine-tuned to mimic human behavior convincingly,’ Tran explained.

Analysts are urging platforms to accelerate their enforcement efforts, warning that if they do not respond promptly to these emerging threats, they will likely become increasingly outpaced.

One individual, Gavesh, continues to monitor Facebook for pages he perceives as fraudulent, though he rarely receives feedback on his reports. Yet, he is gradually rebuilding his life within the tourism sector and healing from his past experiences, stating, “I can’t say that I’m 100% out of the trauma, but I’m trying to survive because I have responsibilities.”

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